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Canada’s unemployment rate stays at 7.1 per cent: StatsCan

Following a burst of job creation in May, Canada’s economy took a breather in June, with the number of jobs and the unemployment rate little changed.

Members of the RCMP return from a boat patrol of a still flooded neighborhood in High River, Alta., Thursday, July 4, 2013. The Alberta flooding could hit next month's Canadian unemployment report, Statistics Canada said Friday. (Jeff McIntosh / The Canadian Press)

Job creation slowed in Canada in June while roaring ahead in the U.S. —a contrasting performance that sent the Canadian dollar lower Friday.

The latest numbers from Statistics Canada follow what some economists had termed a “jaw-dropping” increase in employment in May, when 95,000 new jobs were created, most of them full time.

That had pushed the unemployment rate down by one-tenth of a point to 7.1 per cent.

But in June, StatsCan said employment was “virtually unchanged,” and the unemployment rate didn’t budge.

The flat Canadian numbers contrast with robust job growth in the U.S., where 195,000 new jobs appeared.

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The contrast weakened the Canadian dollar, which was down 0.48 of a cent to 94.57 cents U.S. near midday.

The new Canadian numbers don’t capture the results of the severe flooding in southern Alberta, StatsCan said. That will be reflected in numbers released a month from now.

In Ontario, overall employment didn’t change much, although the overall numbers masked one troubling trend: A gain in part-time work was offset by a decline in full-time work, StatsCan said.

Employment in Ontario is up 1.6 per cent compared with a year ago. In Canada, employment is up 1.4 per cent compared with a year ago.

The new survey shows the start of the summer-job market for students.

Among returning students aged 20 to 24, the employment rate was 68 per cent in June, up from 63.2 per cent in June 2012. The employment rate for 17- to 19-year-old students was flat at 51.9 cent.

Douglas Porter, chief economist for BMO, noted that job growth for the first six months of the year was about half of last year’s gain for the same period.

“Underlying job growth has clearly geared down, but has not collapsed, and we expect it to remain mild in the second half, pointing to some modest improvement in the jobless rate,” he said in a note.

The weak job numbers in Canada are “a mild negative for the Canadian dollar,” he said.

“But we would stress good news for the U.S. economy is ultimately good news for Canada as well.”

Erin Weir, economist for the United Steelworkers, took a darker view.

“I think the shift from full time to part time is definitely a negative trend,” he said.

Since January, Canada has created about 14,000 jobs a month, Weir said:

“The trend is that Canada’s job market is crawling along at a snail’s pace, not creating enough jobs to keep pace with population growth.”

“We’re treading water at a time when 1.4 million Canadians are unemployed, so there’s very little hope for those unemployed workers to find jobs.” he said.

Derek Holt of Scotiabank said that adjusting for the relative size of the two economies, Canada’s rate of job creation is less than half that of the U.S.

“The U.S. is going into a period where the U.S. economy is going to pretty sustainably outperform Canada,” he said.

“We’re doing reasonably well as an economy,” he said. But Canada was faster that the U.S. to adopt stimulus measures in the last downturn, and they’re now running their course.

Pent-up housing demand in the U.S. will be unleashed and continue to push the U.S. economy along, he said, but again, Canada’s housing boom has run its course.

Those factors will continue to strengthen the U.S. dollar relative to the loonie, he said.

Jayson Myers, who heads Canadian Manufacturers and Exporters, said monthly fluctuations are to be expected, and the jobs report “isn’t worrying, it’s just disappointing.”

Both governments and consumers are moderating their spending, Myers said, and that dampens job growth.

“On the manufacturing side, there’s still a lot of uncertainty about when customers are going to come back in to the market,” he said. “It’s very volatile, very uncertain for a lot of companies about whether customer demand is going to hold up.”

Eric Hoskins, Ontario’s employment minister, acknowledged the June job numbers are modest, but said that Ontario employment growth is much rosier when taken over a longer period.

“We have created since the bottom of the recession in June 2009 444,000 new jobs. More than 90 per cent of those jobs have been full-time jobs,” he said.

Tory critic MPP Monte McNaughton said Ontario is hardly on the right track considering that “Ontario lost more full-time jobs than any other province.”

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